"Predatory Lending" … How About Predatory Government?

What does “predatory” mean, exactly? Legally and politically, it means that somebody is doing something you don’t like. If you feel somebody is charging more than you would like them to charge, then you call it predatory. This may be fine as a description of how one feels; but it’s no legal, objective definition. Nobody ever provides the objective definition of predatory, so we can only assume that when a liberal/socialist uses it, none is intended or needed. “It’s how I feel.Now shut up.”

Wikepedia defines predatory lending as follows: “Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly defines predatory lending as ‘imposing unfair and abusive loan terms on borrowers.'”

Essentially, the federal government is saying, “Predatory lending is any lending that is unfair. Anyone who’s unfair should be prosecuted, fined and/or jailed.” Gee, who can argue with that? The problem is that there’s never any definition of “unfair.” It’s like a child who loses a game, picks up the game board and pieces, and throws them across the room. “Unfair!” the child screams. That’s pretty much what the governing establishment of the United States defines as illegal these days.

A predator is actually someone who initiates force or fraud. But the situations to which the term “predatory lending” is applied never involve force, and rarely if ever involve fraud. Fraud is when you tell a lie or deliberately misrepresent something in order to get someone to do something you want them to do. It’s reasonable to call objectively proven fraud predatory. It’s also reasonable to consider fraud as illegal behavior. But this still doesn’t justify calling anything you don’t like “predatory.”

At certain times and places in life, sometimes there’s greater demand for something than there is supply. For example, there might be more people seeking to buy houses than there is capital available to loan money to people to finance those houses. Too few lenders for too many buyers would be the situation. In such a context, lenders are naturally going to be more particular about to whom they lend or do not lend, how much interest they charge, and how strict the terms of the loans would be. If YOU were in the lending business, you would do the same. Liberals and socialists consider such situations unfair and therefore immoral.

They say that because it’s immoral, it should also be illegal. Yet once again, they never define what “predatory” is. They simply apply the label to situations that are stressful because of an imbalance between supply and demand, and immediately demand that such situations be made illegal. They’re counting on the emotions generated by the term to do the convincing for them.

The ironic thing about all this is that liberal and socialist policies actually create most of the problems these very people condemn.

Socialism and government intervention create booms, busts and shortages. For example, government has regulated medical care to the point that there are fewer and fewer primary care doctors than ever before. People are waiting for medical care as never before in the United States, fewer young people are going to medical school, and things are about to get a whole lot worse under the financial and regulatory restraints of ObamaCare. In short, decades of government intervention in medical care has created shortages of medical care. Sure, government pays for more medical care than ever before, and ObamaCare, like Medicare for the elderly, promises to make medical care a free entitlement for the entire population. But fewer people have access to medical care, especially quality and specialized medical care, than ever before. The reason: Too much demand for too little supply. Government did the same thing to the real estate market. It artificially created demand for homes through a combination of Clinton and Bush Administration measures, plus policies initiated by the U.S. Federal Reserve, and as a result we got the biggest real estate boom followed by the biggest real estate crash in all of human history.

Without all this socialism, there would be far less to complain about than we have today. Nevertheless, liberals and socialists continue to scream that the problem is the people who want to make money. (It’s ironic how most liberals are rich.) “If there weren’t people who wanted to make so much money, then there wouldn’t be all these predatory practices.” Obama says it daily and his Republican counterparts bow their heads in silence and go along, agreeing or not — we have no way of knowing because socialist policies keep carrying the day, in the end.

How are those anti-predatory policies working out for you, America?

It’s time to redefine predator according to what it actually is:Somebody who initiates force or fraud. You cannot and should not blame people for charging what the market will bear. If prices are too high, then support the expansion of a free market where people can sell the same products and services more cheaply and possibly more efficiently.

The marketplace is the ONLY place where solutions can occur. When you subvert or eliminate the marketplace, you go from high prices to … no prices, or shortages, or (in the case of extreme socialism and Communism) nothing at all.

That’s what we’re seeing in slow motion as the United States gradually moves towards the socialism that other nations have moved to before, always ending in tragedy and failure. Optimism and hope reside in complete, 180-degree U-turns away from our current policies.

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The views expressed here are those of the author and do not necessarily represent the views of Capitalism Magazine. Capitalism Magazine often presents views that we do not entirely agree with, because they may still contain information of value to our readers.